199 Costa Rica's top investment market Santa Teresa

[Richard Bexon]

Good afternoon, Andrea. How are you doing?

[Andrea Bissinger]

Hi, Richard. I'm doing great. Thank you.

How are you?

[Richard Bexon]

Very, very good. Thank you. I think this is the second person that we've ever had from Santa Teresa join us on the podcast.

So it's kind of nice to get you on it.

[Andrea Bissinger]

Cool, cool. Happy to be here.

[Richard Bexon]

Awesome. Well, my first question that I always like to ask people is, you know, markets have had a pretty good start in 2024. However, real estate worldwide is somewhat slowing down.

I mean, what are you seeing here happening in Costa Rica in general, and specifically in Santa Teresa?

[Andrea Bissinger]

Yeah, I think well, in Costa Rica in general, I think there's been there's been a good start to 2024. In Santa Teresa specifically, I think to to answer that question, it's kind of just important to know, you know, and understand the background of the market, and how it grew significantly during 21 and 22. Those COVID years were it was one of the markets that I would say grew the most in the country, together with other similar destinations like Nosara.

So I think that's important to understand, you know, when kind of talking of the current market and what's happening. In in the current market, we did we have experienced a little bit of a slowdown. And, and we've experienced that since last year, basically after the 2021 and 2022, kind of like explosive market, the market corrected a little bit, I think that's a that's a trend that happened all over the world.

And Santa Teresa is definitely not the exception. And, and, yeah, basically, that correction that started last year, when you know, other, other markets, other countries opened up after COVID. It's, it's kind of we've seen it in in this first part of 24.

It has definitely been busy, but I would say that it's busier for those sellers and those products that have already accepted that correction, and have gone through that price adjustment.

[Richard Bexon]

So yeah, I mean, to give people an understanding, because a lot of people, you know, don't really understand Santa Teresa, and kind of what happened there in the market. I mean, let's take a property in I don't know, 2020 2021. And then where it kind of got to today, like, I mean, what happened in that market over that four year stretch post pandemic?

[Andrea Bissinger]

So the prop, for example, a property that was listed before the pandemic could have been half the price of what it went to during the pandemic. So basically, in 2020, the borders closed, you know, there was obviously a lot of uncertainty of what was going to happen. So there were some fire sales there.

And then as soon as the borders opened up, Santa Teresa became kind of this like, very highly sought after area. And it was in a way discovered, obviously, it obviously it had already been moving. But there was definitely a hype during that time.

And a lot of people started wanting to come here and buy here. And and kind of like discovered that hype of Santa Teresa. And that made the prices just go nuts.

So it was two years, where we experienced a lot of things like like sight unseen purchases, like bidding wars, a lot of things that weren't common to our market before.

[Richard Bexon]

Yeah.

[Andrea Bissinger]

So that started happening, you know, it was kind of like a, you know, a weekly thing that we had, you know, sight unseen offers or bidding wars on a property or we didn't negotiate any price, we only negotiated over asking and there was never a negotiation, you know, under asking. So that was a little bit of you know, what happened and how it changed drastically from pre COVID to to the COVID years.

[Richard Bexon]

I mean, a lot of people again don't know, you know, like, can you describe Santa Teresa mouthpiece to us? And like, what are the type of people are there? Because I say that every single beach town in Costa Rica is very, very different.

And so are the people in it?

[Andrea Bissinger]

Yeah. Well, I mean, Santa Teresa is first of all, the most important thing and characteristic thing of the town is that it's one strip. It's like a single strip, you know, of road that goes all the way from Malpais, which is kind of like the southern tip of the town and also the southern tip of the peninsula of Nicoya.

And then it stretches out to Manzanillo. And then after Manzanillo, there's like a big family ranch that's also protected and it's hundreds of acres. And then on the southern border is the Cabo Blanco reserve.

So our town is kind of contained by these two, you know, like protected areas. And so there you have Malpais, then comes Playa Carmen, then Santa Teresa, Playa Hermosa and Manzanillo. Those are sort of like the beaches that are comprised in this like grand Santa Teresa area.

And, you know, it's a surf town. It's a beach town with a lot of great surf breaks that work year round. So its main activity and main attraction is the surf.

You know, that's what it's all about. But there is also some other things that make it very popular. And I would say one of those things is the food.

There's a great food scene and people from all over the country and, you know, all over the world visit because of the great food scene that there is. There's a lot of international restaurants and just like a lot of options in such a small stretch of land, you know. And then there's also a very international community here.

There's a little bit of everything. There's Latin Americans, there's Europeans, there's North Americans, there's, you know, there's a little bit of everything, whereas some other beach towns in Costa Rica are more North American or like more, you know, there's a specific like citizenship where here it's a little bit more varied. So so that's kind of there's also a yoga and a wellness scene as in most beach towns in Costa Rica.

But I would say the main things here in Santa Teresa are like the surf that's very attractive and friendly for all ages, all levels of surf, etc. And it works all year round. And the food.

[Richard Bexon]

Very, very good food in Santa Teresa. I can say that. So, yes.

I mean, where is the majority of the investment being, you know, in the area over the last three years?

[Andrea Bissinger]

In the area or like the type of properties?

[Richard Bexon]

Yeah, I mean, but like, where is it being? And then like, what are the types of properties just so that people understand?

[Andrea Bissinger]

So it's been in the last years, COVID actually had like something very interesting that happened during those that time when when the market kind of exploded. It also did so in a very specific area. And the area that grew the most was North Santa Teresa and Playa Hermosa.

Playa Hermosa had already started developing before that. But during that time, it kind of just went crazy. And that's because the beach there is also has really great surf and it's a very friendly for kids for all for all the levels.

It's just like a really fun surf beach break. And there's also a private school. So one of the things that we saw that happened during during COVID is that a lot of people, you know, instead of just buying a secondary home or vacation home or even just an investment, what they did is that they actually moved here.

And when they moved here, they wanted to be somewhere that was close to town, but you know, not at not in the middle of town, because they were moving their whole family here. So yeah, so Hermosa kind of became the perfect place. And that has been the focus of, you know, investment in the last few years.

So obviously, Santa Teresa, the center of Santa Teresa still is still the commercial center and where all the restaurants and shops and all of that is so there's still a lot of movement there. And then Hermosa definitely became the most attractive real estate scene.

[Richard Bexon]

And has it been mainly kind of more homes built like single family homes? Has it been have you had hotels, you know, commercial?

[Andrea Bissinger]

The definitely residential real estate here is what moves the most people, people just looking for either, you know, a, you know, a vacation home, a secondary home somewhere where they can spend a few months and rent out the rest of the time to generate some income. So that's turnkey home, residential homes that they can rent out when they're not here is the focus. There's also obviously with the growing town, and there's also a growing interest in commercial properties to provide, you know, the services for all those people.

But definitely hotels and such haven't been so that attractive here. It's been mostly residential homes.

[Richard Bexon]

I mean, it's it's heavy lifting building a hotel and you got to make sure you have the water infrastructure and all the permits. It's not easy. Believe me, the guys at Nantico took them years.

So yeah.

[Andrea Bissinger]

And that's one of them. That's just like a lot of other towns in Santa Teresa, water has been an issue. We didn't have it.

IEA, which is the National Water Institution, wasn't here until about like six or seven years ago. So before that, everyone was just on wells. Now there's IEA, but there's a whole bunch of companies don't have enough water for all, you know, for bigger projects.

[Richard Bexon]

I mean, what are the beach towns surrounding that area that you still think are a good investment and why?

[Andrea Bissinger]

So I was when I was talking about kind of like the layout of the town, I mentioned Manzanillo. Manzanillo is the town that's to the north of Santa Teresa. So basically that last beach town up north before that big family ranch.

It's basically Manzanillo, that big family ranch, if you're looking at the coast and then Coyote, that's the next beach. So Manzanillo, I think, is really attractive because it doesn't have surf. So it hasn't become as popular and it wasn't as popular during the whole pandemic market.

So the prices are still pretty attractive and the development we have clearly seen that it's going north here in Santa Teresa. Just like I explained, you know, people are going to Playa Hermosa and that's like the area that they're focused on. So just, you know, a short five or to ten minute drive from Hermosa is Manzanillo and the prices there are a fraction of what they are in Playa Hermosa.

And there's another interesting phenomenon that I think makes it a very attractive area. And it's that there's a big school, big Waldorf's new school that came to town and they are located on like the hills of Manzanillo. So Manzanillo is kind of, it's become this like sweet spot between the surf of Playa Hermosa and great education, you know, for the kids of all the families that are there.

So even though it doesn't have surf right in front, it has like a really good location. So I think there is, you know, you have a great investment opportunity.

[Richard Bexon]

I mean, can you give people an idea of what land would cost around there, just to give them an idea?

[Andrea Bissinger]

Yeah, well here, obviously it's hard to talk in terms of per square meter prices, which is what most people expect to know. But I would say in Manzanillo, you can still find, you know, a piece of land for around $150,000, where in Santa Teresa, it's hard to find anything below the $300,000 mark. And that's, and that's, even that is very hard, you know.

Yeah.

[Richard Bexon]

Well, I mean, I agree with you on Manzanillo. It's absolutely beautiful. You know, it's a spectacular location and very close to everything as well.

I understand, you know, real estate law pretty well. I mean, yeah. What are some of the misconceptions people have, or some of the things that they just weren't aware of when it comes to more of the legal part of real estate here in Costa Rica?

[Andrea Bissinger]

I think, well, this is going to, this is kind of going to sound like I'm still in the legal part of things. But I think the most important thing that people don't realize is that important is the role that the attorneys play in the transaction here, because they're also notary public. So that's not, for example, in the US, that's not the case.

So because they have that double role of both being your attorneys that are conducting your due diligence and reviewing everything, they're also the ones in charge of doing the transfer of the title. So lawyers here can, you know, make or break a deal. So it's really important to have, you know, choose the right ones.

That, I think, that I think is a big one. And then I think another one that we struggle a lot with, both in the legal side of things and as an agent is the misconception of real estate being a highly regulated thing, like it is in the United States. Whereas here in Costa Rica, it's not as regular, like transactions are not as regulated as they are in other places like Europe or the United States.

With things, you know, like house inspections and soil tests and all of those things are necessarily regulated here. So people sometimes have different expectations of what's going to happen in a deal based on the results of those things, you know, and basically here, it's all, all based on what's customary, you know. So again, that just speaks to how important it is to have the right people on your side.

[Richard Bexon]

I always say to people, caveat emptor, buyer beware, you know, in this country, there's not once you buy something, there's not much going back. So yeah, you need to make sure that you've got all your I's, you know, dotted T's crossed. And yeah.

[Andrea Bissinger]

Yeah, yeah, correct.

[Richard Bexon]

I mean, what do you think is going to happen for the rest of 2024 for Costa Rican real estate?

[Andrea Bissinger]

I think, honestly, I think it's just going to, it's going to, the correction of the market is just going to keep going. I think there's still a lot of sellers and a lot of people who haven't fully accepted it because we're in a coastal market. We are also a seasonal market.

So we just, we're just coming off the high season and now we're actually going into the lower season. So I think that trend is kind of going to follow into the lower season. I think there's a lot of opportunity for those who are willing to adjust their prices, listen to, you know, real valuations and base their prices on real market numbers, you know, because I think buyers are really looking out for that.

And a lot of them are looking for opportunities, special, especially now going into the low season. And, and I think that's, I think that's what we're going to see the most, you know, people, people jumping on those opportunity purchases on those properties that they really see value in. So, so yeah, I think that's what, that's what we're going to see.

And I also think the U S election is going to have, you know, until that happens, we won't really know exactly what's going to happen after that.

[Richard Bexon]

I think it's going to be positive for Costa Rica, whatever happens anyway. So, so yeah, I agree.

[Andrea Bissinger]

I agree. I think, I think it is. But you know, we don't know how positive it's going to be, it's going to be positive.

We just don't know the extent of it.

[Richard Bexon]

There's going to be uncertainty running up to it, you know, for sure. Which means I think people are going to be a little hesitant to pull the trigger or do, as I like to say, want to get out of kind of dodge, you know, card and Costa Rica offers that. You'd mentioned it was seasonality here.

Is there a particular time of the year that you think is best to come to Costa Rica to buy? I never asked that question before, but yeah.

[Andrea Bissinger]

To buy?

[Richard Bexon]

Yeah. I mean, to buy, like you mentioned, like, you know, we're coming out of high season here, is it better to come and September, October, you get to see more property, you know, maybe some of the buyers that didn't sell during the up and coming high season are struggling a little bit. Like, I mean, what's your advice on the best time of year to come to Costa Rica to buy real estate?

[Andrea Bissinger]

Yeah, that's actually a very interesting question because our market, our real estate market goes completely in hand with the rental market. So with this, you know, seasonal rental market, so people are buying when they're coming on vacation. So they're coming for the summer and that's when they're looking at property and that's when they're, you know, interested in buying.

But I would say that the low season for rentals is actually more attractive for buying because that's when people already, you know, the high season has passed and the people who didn't sell during that season are now more eager to sell and you can find better deals. You know, people are going to be way more open to negotiate. There's going to be more flexibility.

So maybe September, October is too rainy here.

[Richard Bexon]

Yeah.

[Andrea Bissinger]

It's hard to actually see property.

[Richard Bexon]

You can only see stuff in the mornings, only in the mornings.

[Andrea Bissinger]

Exactly. So, I mean, I don't know if September, October is the best just because it can't like the weather can actually limit your capability of seeing property. But for example, August, you know, July, August, I think is a perfect little nook there to come buy property.

[Richard Bexon]

What businesses or services do you think are missing in your area? What would you love to see?

[Andrea Bissinger]

I think what's missing is more is recreation because we have the surf, you know, like obviously there's the surf and it's great and people love it and it's what a lot of people are looking for. But, you know, there's a growing like family community in Santa Teresa and all those kids need things to do because the parents need them to do something. Yeah.

So I think just like recreational facilities where, you know, it's interesting because someone actually asked this question like three days ago in the Facebook, you know, like Santa Teresa chat. And I was looking through the comments and most of the people were like, please, somewhere where I can take my kids and I can drink a coffee while they're playing. Like I have 20 comments, the same thing.

So I think that's definitely what's missing here. Something other than the surf.

[Richard Bexon]

I agree. I mean, I think always in kind of developing beach towns, you know, as it gets to a certain level, people look for that. And I think you've started to see a lot more of that, you know, in Guanacaste, you know, there are like climbing walls with a coffee and a bar next to it and that kind of stuff.

So you're starting to see it's just that I mean, I think certain beach towns have developed a little bit more than other ones because they've had more time, you know, to develop.

[Andrea Bissinger]

Absolutely.

[Richard Bexon]

Well, my last question for you, Andrea, if you inherited $500,000 and you had to invest it in business or real estate in Costa Rica, what would you invest it in? Why?

[Andrea Bissinger]

In Costa Rica?

[Richard Bexon]

Yeah.

[Andrea Bissinger]

Well, yeah, I would definitely invest in real estate. I mean, that's the business I'm in. And honestly, it's the business I believe in.

Santa Teresa, unfortunately, I think I would be a little bit priced out. I mean, I'd love to invest it here. But yeah, it's I mean, the prices just unfortunately, for me, it wouldn't make sense.

I really like the Guanacaste area. I surf too. So I mean, there's also great surf there.

So it's really attractive to me too. And I think there are areas that are up and coming that you can still get in, you know, at that price point and kind of create something really nice. I really like the Avellanas, Lagartillo area.

So I would probably, you know, head out there and maybe look for a piece of land and buy a couple of and build a couple of, you know, smaller homes to Airbnb or rent out. I also I'm actually from originally from the Caribbean coast. I grew up in Puerto Viejo.

So I own land there and I'm actually developing a project right now I'm doing. I'm building primary like more primary affordable housing, which I think is kind of also a market that has been a little bit forgotten with this big real estate boom. A lot of people want to capitalize on the like multi million dollar homes.

When while it's great, you know, the people who can actually afford those homes are less. So I'm kind of like targeting that that that section of a little bit, you know, you know, smaller homes and more affordable for both Costa Ricans and international, international clients. So I'm working on that.

So I would probably invest it there, too.

[Richard Bexon]

Good answer. Good answer. I like it.

Well, Andrea, it's been an absolute pleasure to have you here on the podcast for anyone that wants to reach out to you. I'll put all your contact details in the description, but very much appreciate you taking the time to join us on the podcast.

[Andrea Bissinger]

Thank you so much. It was great talking to you, too.